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DECREE No

DECREE No.68-CP OF NOVEMBER 1st, 1996 OF THE GOVERNMENT PROVIDING DETAILS FOR THE IMPLEMENTATION OF THE MINERALS LAW

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Minerals Law of March 20, 1996;

At the proposal of the Minister of Industry;

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- This Decrees provides details for the implementation of the Minerals Law adopted by the National Assembly of the Socialist Republic of Vietnam on March 20, 1996.

Article 2.- The provisions of this Decree are applicable to the management, protection, and basic geological survey of the mineral resources and all mineral activities (survey, prospection, exploitation and processing of minerals) in Vietnam by Vietnamese and foreign organizations and individuals.

Chapter II

MANAGERIAL COMPETENCE OF THE STATE ON MINERALS

Article 3.-

1. The Ministry of Industry performs the function of State management over minerals in the whole country and has the following tasks and powers:

a/ To elaborate and submit to the Government for promulgation, or to promulgate according to its competence, legal documents on the management, protection, basic geological survey of mineral resources and mineral activities.

b/ To organize and draw up the general plan and plan for development of basic geological survey of mineral resources in the whole country.

To assume the main responsibility and coordinate with the Ministries and branches concerned at the central level, the People�s Committees of the provinces and cities directly under the Central Government in drawing up and submitting to the Government for decision the strategy, general plan and policies regarding the mineral resources and the development of the industry of exploiting and processing minerals.

c/ To organize the evaluation and approval of the projects on mineral prospection and the feasibility reports on the exploitation and processing of minerals and on designing the mines as prescribed in this Decree.

d/ To issue, extend, withdraw and allow the return of the permits for operation in mineral activities, to allow the assignment of the right to conduct mineral activities as prescribed in this Decree.

e/ To conduct the popularization, guidance and control among the branches and localities, organizations and individuals in the implementation of legislation on minerals; to organize specialized control and inspection in minerals as provided for in Articles 58,59 and 60 of the Minerals Law; to check and inspect the activities in basic geological survey in mineral resources.

g/ To settle the disputes, complaints and denunciations in mineral activities according to its competence defined in Articles 57 and 62 of the Minerals Law.

h/ To manage the activities of international cooperation in basic geological survey of mineral resources and in mineral activities.

i/ To register, monitor, evaluate and compound the results of the basic geological survey on mineral resources and the mineral activities in the whole country and report them periodically to the Government.

k/ To coordinate with the People�s Committees of the provinces and cities directly under the Central Government and the Ministries and branches concerned in the protection of the unexploited mineral resources.

2. The Government shall issue a separate regulation on the system of organization, tasks and powers of the State managerial agencies in geology and mineral resources of the Ministry of Industry.

Article 4.-

1. The Ministries, ministerial-level Agencies, the Agencies attached to the Government (hereafter referred to as Ministries) shall, according to their functions, tasks and powers, have to coordinate with the Ministry of Industry in the management and protection of the mineral resources and mineral activities.

2. The Ministries having the State managerial function over the branches producing, using or trading in raw mineral materials have the following duties:

a/ To coordinate with the Ministry of Industry and the concerned Ministries and branches at the central level and the People�s Committees of the provinces and cities directly under the Central Government in elaborating and submitting to the Government for decision the mineral resources policies, the strategy, general plan and plans for developing the industry of mining, processing, using and trading in minerals including the import and export of the minerals related to their respective managerial function.

b/ To coordinate with the Ministry of Industry in drawing up and submitting to the Government for issuing or to issue according to their competence, the regulations to guide the mining, protection and use of the mineral resources related to their respective managerial function.

c/ To direct and control the implementation of the strategy, policies, planning and legislation on minerals by the units under their direct management.

d/ To cooperate with the Ministry of Industry in the discharge of other duties concerning State management over the basic geological survey of mineral resources and mineral activities related to their respective managerial function.

Article 5.- The

Article 6.- The Council for Evaluation of Mineral Reserves which has its head office at the Ministry of Science, Technology and Environment shall assist the Government in the evaluation and approval of the reserves mentioned in the reports on mineral protection (except those minerals for use as common building materials) in order to study their feasibility for exploitation. Its organizations and activities shall be stipulated in a separate Government regulation.

Article 7.-

1/ The People�s Committees of the provinces and cities directly under the Central Government (hereafter referred to as provinces) shall, according to their functions, tasks and powers :

a/ Issue according to their competence regulations to carry out the provisions of the Government and of the Ministry of Industry concerning the management and protection of the mineral resources and the management of the mineral activities in their localities.

b/ Take the initiative in cooperating with the Ministry of Industry, the Ministry of Planning and Investment, the Ministry of Construction, the Ministry of Defense, the Ministry of the Interior, the Ministry of Culture and Information, the Ministry of Agriculture and Rural Development to zone off the areas banned from mineral activities; elaborate or take part in the elaboration of the plans for the development of the industry of mining and processing of minerals on their territories.

c/ To organize and direct the implementation of measures to protect the untapped mineral resources in the localities together with the protection of the environment and other natural resources, ensuring security and public order, protecting the lives and health of the people and the properties of the State and citizens.

d/ To organize the evaluation and ratification of the feasibility reports on the mining and processing of minerals and mine designing as provided for in this Decree.

e/ To issue, extend and withdraw the permits for the mining of minerals for use as common building materials and for their full exploitation according to the competence defined in this Decree; to provide consultancy on the issue of other kinds of permit for mineral activities in the locality; to settle within the ambit of their responsibility and powers the conditions concerning the renting of land, the use of infrastructure and other related conditions for the organizations and individuals that are allowed to conduct mineral activities and basic geological survey on mineral resources in the locality.

g/ To conduct popularization, education, supervision and control over the implementation of legislation on minerals by all organizations and individuals in the locality.

h/ To settle or take part in settling the disputes in mineral activities and the handling of law-breaking acts in mineral activities in the locality according to the competence defined in Article 57 of the Minerals Law and other provisions of law.

2. The provincial/municipal Industrial Service has the duty to assist the People�s Committee of the province in exerting the function of State management over minerals as provided for in the Minerals Law and this Decree. The State managerial tasks and powers of the provincial/municipal Industrial Service regarding minerals shall be defined by the Minister of Industry.

Article 8.- The People�s Committees of the districts and cities under the provinces, the towns, townships and communes (hereafter referred to as district and commune) shall, according to their function, tasks and powers, have the responsibility:

1. To take measures to protect the untapped mineral resources in the locality combined with the protection of the environment and other natural resources, to ensure public security and order, protect the lives and health of the population and the properties of the State and citizens.

2. To settle within its responsibilities and powers the conditions related to the renting of land, the use of the infrastructure and other related conditions for those organizations and individuals that are allowed to conduct mineral activities or basic geological survey on mineral resources in the locality as stipulated by law and under the guidance of the provincial People�s Committee.

3. To conduct the popularization, education and supervision of the implementation of the legislation on minerals; to take part in settling the disputes in mineral activities and handling according to their competence the violations of the legislation on minerals in the locality.

Article 9.- Competence to issue, extend, withdraw, allow the return of the operating permit in mineral activities and allow the assignment of the right to mineral activities :

1. The Ministry of Industry shall issue the following kinds of permit:

- Permit for mineral survey;

- Permit for mineral prospection;

- Permit for exploitation and permit for processing minerals of various kinds, except the permits for exploitation and permits for processing of minerals under the granting competence of the provincial People�s Committee defined in Clause 2 of this Article;

- Permits for exploitation, permits for processing minerals for use as common building materials in an area lying between two or several provinces or issued to a foreign organization or individual or a joint venture involving a foreign party.

2. The People�s Committee of a province shall issue the following kinds of permit in the area under local administrative jurisdiction:

- Permits for the full exploitation of minerals of various kinds in the areas already zoned off by the Ministry of Industry as provided for in Article 66 of this Decree;

- Permits for mining, permits for processing minerals used as common building materials and peat issued to organizations and individuals in the country, except permits to mine, and permits to process minerals of the categories under the issuing competence of the Ministry of Industry defined at Clause 1 of this Article.

3. The agency which has the competence to issue a kind of permit for mineral activities shall have the right to extend, withdraw or allow the return of that permit and to assign the right to mineral activities according to this kind of permit.

Chapter III

BASIC GEOLOGICAL INVESTIGATION OF MINERAL RESOURCES

Article 10.- Basic geological investigation of mineral resources comprises the following activities:

1. To investigate and discover the potential of mineral resources together with drawing the geological map of the area and conducting a specialized study on the geology of this area.

2. To evaluate the potential of mineral resources according to the kinds or groups of minerals and in the light of the prospect of the geological structure.

Article 11.- The activities in basic geological investigation of mineral resources shall be conducted according to the general plan and plans of the State.

The Ministry of Industry shall submit to the Government the general plan and plans for basic geological investigation of mineral resources and the Ministry of Planning and Investment shall evaluate and submit the plan to the Government for ratification.

The Ministry of Finance and the Ministry of Industry shall draw up the Regulation on the allocation, management and settlement of the State budget capital for the activities in basic geological investigation of mineral resources and submit it to the Government for promulgation.

Article 12.- The organizations conducting basic geological surveys of mineral resources have the following rights and duties:

1. To register their tasks and plan of operation in geological investigation as provided for by the Ministry of Industry;

2. To conduct activities of basic geological investigation of mineral resources according to the project already ratified and the assigned plan.

3. To abide by the process, rules and economic and technical norms for geological investigation issued by the Ministry of Industry.

4. To ensure the faithfulness and adequacy in the collection and compilation of the documents and information about the geology and minerals; to protect the State secrets concerning the information on minerals as prescribed by law.

5. To protect the environment, the mineral and other resources while conducting basic geological investigation.

6. To send the report on the results of the basic geological investigation on mineral recourses to the State geological archives and the samples of geology and minerals to the geology museum as prescribed by the Ministry of Industry.

7. To be commended and rewarded by the State when they have made meritorious accomplishments in geological research and the discovery of mineral resources.

8. To be allowed to send samples abroad for analyses and tests as prescribed by the Government.

Article 13.- All reports on the results of basic geological investigation of mineral resources must be evaluated, registered and submitted to the State geological archives as prescribed by the Ministry of Industry.

The State geological archives agency has to protect the State secrets on mineral resources and create favorable conditions for all organizations and individuals to use the results of the basic geological investigations of mineral resources and the information and documents on minerals as prescribed by the Ministry of Industry.

Article 14.- The Ministry of Industry shall provide details of the contents of the project of basic geological investigation on mineral resources; of the State registration of the tasks and plans for the activities in basic geological investigations of mineral resources, the State geological archives and geological museums, issue and guide the implementation of the regulatory documents, the norms and unit prices in basic geological investigations of mineral resources.

Chapter IV

ORGANIZATIONS AND INDIVIDUALS ENGAGED IN MINERAL ACTIVITIES

Article 15.- The organizations and individuals allowed to conduct mineral activities as prescribed by the Minerals Law shall include:

1. The Vietnamese organizations qualified under the legislation on State enterprises, private enterprises, stock companies and limited liabilities companies, cooperatives and other economic organizations whose founding objectives in mineral activities are allowed by the competent State agency which founds it, or allows its founding and registration or recognized it.

2. The foreign organizations or individuals or the joint ventures involving foreign parties operating in Vietnam according to the legislation on foreign investment in Vietnam.

Article 16.- The organizations and individuals mentioned in Article 15 of this Decree that wish to be granted an operating permit in mineral activities must have the necessary investment capital (including loans) in order to carry out the project. The prescribed capital of an organization or individual allowed to exploit minerals shall not be less than thirty per cent (30%) of the total estimated investment capital of the project applying for permission to exploit minerals.

Article 17.- The organization or individual conducting mineral prospection must have the necessary technical equipment and professional standard as prescribed by the Ministry of Industry.

Article 18.- An organization or individual allowed to exploit minerals shall conduct their exploitation activities as defined in the permit only if the executive director has the managerial standard and capacity in mining recognized under Article 36 of the Minerals Law; the Ministry of Industry shall issue an appropriate regulation concerning the exploitation of mineral water or natural hot water or full exploitation.

The Minister of Industry shall issue the criteria for the required standard and capacity of the executive director of a mine.

Chapter V

AREA, SCOPE AND DURATION OF MINERAL ACTIVITIES

Article 19.- The areas banned to mineral activities are areas which need protection or are specifically reserved for important objectives of the State or society as prescribed by law.

1. The areas banned to mineral activities comprise the following:

- Areas with historical and cultural relics already classified and registered;

- National preserves, protection forests, geological protection areas;

- Areas exclusively devoted to defense and security purposes;

- Areas within the corridor for the protection of dykes, embankments, river banks, bridges, national highways and railways;

- Areas exclusively reserved for religious practices;

- Urban areas or areas with important infrastructures.

2. The Ministry of Defense, the Ministry of the Interior, the Ministry of Culture and Information, the Ministry of Agriculture and Rural Development shall, within their functions, tasks and powers, have to coordinate with the People�s Committees of the provinces to set the delineation between the areas banned to mineral activities within the scope of administrative jurisdiction of each province. The President of the People�s Committee of the province shall submit the report to the Government for decision and inform in writing the Ministry of Industry of the areas banned to mineral activities.

3. With regard to the areas temporarily banned to mineral activities for any reason as prescribed by law, the State agency with managerial competence over these areas shall have to inform by writing the Ministry of Industry and the provincial People�s Committee.

4. The exploitation of subsoil minerals within the areas banned to mineral activities without using the surface ground shall also have to get the written consent of the State agency with managerial competence over these areas.

Article 20.- The areas with restrictions to mineral activities are areas where the State decides to restrict such activities in one of the following forms:

- To give exclusive right to mineral activity to one or a number of organizations of the State;

- To limit the production output;

- To limit the export of products of the exploitation.

The areas with restrictions to mineral activities shall be prescribed in a separate document of the Government.

Article 21.- The areas submitted to bidding in mineral activities comprise the following:

- Areas where lie minerals which, under Government regulation, must be submitted for bidding in prospection and exploitation activities;

- Areas or mineral mines which have been explored with State capital and which are now submitted to bidding or to the selection of bidders for exploitation.

Article 22.-

1. The area to be surveyed and allotted to one mineral exploration permit shall not exceed two thousand square kilometers (2,000 km2) to be zoned off according to square coordinates without limitation as to the kinds of minerals to be surveyed in the area. In special cases where an area of more than 2,000 square kilometers is needed, the Ministry of Industry shall have to submit the project to the Prime Minister for consideration and decision before granting the permit.

2. The permit for mineral survey can be granted to a number of organizations or individuals operating in the same area. An organization or individual that is the first to apply for exploration and exploitation according to the procedures prescribed by law shall be given priority consideration.

Article 23. -

1. The term of a mineral survey permit shall not exceed twelve (12) months.

2. The permit for mineral survey in an area of one hundred square kilometers (100km2) and more may be extended once but for no more than twelve (12) months on the following conditions at the time of the application for extension:

- No other organization or individual has earlier applied for exploration in that area;

- The organization or individual that is allowed to conduct the survey has discharged all its duties as prescribed in the earlier permit;

- The permit for mineral survey shall remain effective for at least thirty days.

- The organization or individual that is allowed to survey for minerals has to file the report on the survey results to the Ministry of Industry explaining the reason for the application for extension of the permit and the program for continued survey attached to the application for extension of the permit.

3. No extension shall be granted to a permit for mineral survey in an area of less than one hundred square kilometers (100 km2).

Article 24.-

1. The area issued with a permit to prospect for minerals which are precious metals and gemstones shall not exceed fifty square kilometers (50km2). In special cases where an area larger than 50km2 is needed, the Ministry of Industry shall have to submit the project to the Prime Minister for consideration and decision before granting the permit.

2. The area issued with a permit to prospect for coal and metal minerals (excluding precious metals) and non-metal minerals (except common building materials) on the mainland with or without water surface shall not exceed one hundred square kilometers (100 km2). In special cases where an area larger than 100 km2 is needed, the Ministry of Industry shall have to submit the project to the Prime Minister for consideration and decision before granting the permit.

3. The area issued with a permit for prospection of minerals of all types on the continental shelf shall not exceed two hundred square kilometers (200 km2). In special cases where an area larger than 200 km2 is needed, the Ministry of Industry shall submit the project to the Prime Minister for consideration and decision before granting the permit.

4. The area issued with a permit for prospection of minerals for use as common building materials on the mainland, with or without water surface, shall not exceed two square kilometers (2 km2).

5. The area issued with a permit for prospection of mineral water and natural hot water shall not exceed one square kilometer (1km2).

6. An organization or individual that meets all the conditions prescribed in Articles 15 and 16 of this Decree may be granted many permits for prospection but not more than five permits and the total area of prospection of these permits shall not exceed five times the area prescribed in Clauses 1, 2, 3, 4 and 5 of this Article.

Article 25.- The term of a permit for mineral prospection, including the time for making the report on the results of the prospection and the feasibility report on prospection shall be at least six month (6) months and at most twenty four (24) months. Extension shall be granted on the following conditions:

1. At the time of the application for extension, the organization or individual that has been allowed to prospect for minerals has discharged all their duties prescribed in the earlier permit; the permit for exploration shall remain effective for at least thirty (30) days.

2. For each extension, the organization or individual has to return at least thirty per cent (30%) of the area of prospection under the earlier permit.

3. That organization or individual shall have to send to the Ministry of Industry attached to the application for extension of the permit a report on the results of the prospection and the real expenses, the explanation of the reason for the extension application, and the program, plan and expenses for the continued prospection.

4. A permit for mineral prospection defined in Clauses 1, 2 and 3 of Article 24 of this Decree shall be given at most two extensions, but the total duration of these extensions shall not exceed twenty four (24) months; in case the prospection permit has been extended and the total period of prospection is forty eight (48) full months and the organization or individual that has been allowed to prospect for minerals has fully achieved or exceeded the volume of work and expenses according to the plan without, however, gathering enough grounds to draw up the feasibility report or needs more time to study the feasibilities for exploitation, the prospection permit shall be renewed if that organization or individual files a valid application.

5. A permit for mineral prospection defined in Clauses 4 and 5 of Article 24 of this Decree shall be extended only once and the extension shall not exceed twelve (12) months.

Article 26.- The area of exploitation of minerals for a permit shall be determined on the basis of the feasibility report on mineral exploitation which has been evaluated and accepted as prescribed in Article 44 of this Decree.

Article 27.- The term of a permit for mineral exploitation shall be determined on the basis of the feasibility report on mineral exploitation which has been evaluated and accepted as prescribed in Article 44 of this Decree but shall not exceed thirty (30) years. Extension shall be granted on the following conditions:

1. At the time of the application for extension the organization or individual that is allowed to exploit minerals has discharged all their duties as prescribed by the Mineral Law and other provisions of law.

2. The permit for exploitation remains valid for at least three (3) months.

3. The application for extension sent to the agency with competence to grant the permit shall be attached with a report summing up the result of the exploitation up to the time of the application for extension, the area and reserve of the untapped minerals at the mine, together with the program and plan for continued exploitation...

4. A permit for mineral exploitation may be extended for several times on the basis of the continuation of the plan for prospection and the consent of the agency with competence to issue the permit, but the total extension shall not exceed twenty (20) years.

Chapter V

SOME REGULATIONS ON FINANCIAL MATTERS AND PROPERTY RIGHT

Article 28.- The permit fees are the fees levied on the granting and extension of various kinds of permits for mineral activities.

The Ministry of Finance shall provide for the levels and the procedures for collecting, remitting, managing and using various kinds of permit fees.

Article 29.-

1. The fee for exclusive right of prospection shall be calculated by the area units in the exploration area and the effective term of the mineral prospection permit according to the following regulations:

1st year: 200,000 Dong/km2/year or 20 USD/km2/year;

2nd year: 300,000 Dong/km2/year or 30 USD/km2/year;

3rd year: 400,000 Dong/km2/year or 40 USD/km2/year;

4th year onward: 500,000 Dong/km2/year or 50 USD/km2/year.

2. The fee for the exclusive right of prospection shall not apply to a prospection permit of which the effective term including extensions is less than twelve (12) months and also shall not apply to prospection activities in the area of exploitation by the allowed organization or individual.

The Ministry of Finance shall provide for the procedures for the collection, remittance, management and use of the fee for exclusive prospection right.

Article 30.- The remittance of advance money for a prospection permit shall be effected only once at the time of the granting of the mineral exploitation permit effective for six months and more; it shall not apply to a prospection permit effective for less than six (6) months and shall not apply to a permit directly funded by State investment capital.

The advance money shall represent twenty five per cent (25%) of the value of the estimated expenses on prospection for the first prospection year. It shall be written in the prospection project or plan already accepted by the permit issuing agency.

If six (6) months after the mineral prospection permit takes effect, the prospection cannot be undertaken while the permit is invalidated, the advance money shall be remitted to the State budget.

If six (6) months after the permit for mineral prospection takes effect the prospection is conducted according to plan, the organization and individual that has been granted the prospection permit may retrieve their advance money.

The organization and individual that is allowed to prospect for minerals is entitled to use the form of a deposit at a Vietnamese bank or a foreign bank which has been licensed to operate in Vietnam instead of making an advance payment.

The Ministry of Finance shall guide the filling of procedures for remitting, registering and managing the advance money or the deposit with regard to the permits for mineral prospection.

Article 31.- The minimum prospection cost calculated by Vietnam Dong/km2/year or USD/km2/year is the minimum expense to carry out the technical engineering services in mineral prospection on every square kilometer within a year (12 months after the permit takes effect). The projected cost of the prospection project must not be lower than the minimum cost of prospection.

The Ministry of Industry shall set the minimum prospection fee for each concrete prospection project when issuing or extending a mineral prospection permit.

Article 32.- With regard to a mineral prospection permit for precious metals and gemstones, irrespective of the area and a permit to prospect for other minerals over an area of from one hundred square kilometers (100 km2) upward, of which the effective term is up to two (2) years (24 months after the permit takes effect) and of which the actual prospection cost to carry out the project within a two (2) years period is lower than the projected minimum cost prescribed by the Ministry of Industry, the difference in value shall have to be remitted to the State budget when the prospection permit expired or is extended.

Article 33.- An organization or individual that is issued a prospection permit shall have to achieve a volume of prospection and expenses corresponding with the project and the prospection plan already accepted by the Ministry of Industry.

In case the actual prospection cost of the previous year is bigger than the estimate and the prospection plan in the year the excess expenses shall be accounted for in the actual cost of the following year.

Article 34.-

1. An organization or individual using the information data of the State on the results of mineral survey and prospection shall have to pay to the State according to the mode of package payment or installment payment according to the output of the exploitation.

2. An organization or individual that has completed the payment for the use of the information on the result of the mineral survey or prospection of the State according to the mode of package payment is fully entitled to use or assign this information to another organization or individual.

3. An organization or individual allowed to pay for the use of the information on the results of the mineral survey and prospection of the State under the mode of installment payment according to the output of exploitation is entitled to use this information for their mineral activities but is not allowed to assign, sell or disclose this information to another organization or individual.

The Ministry of Finance and the Ministry of Industry shall provide guidance for the method to determine the value, modalities and procedures of payment of the cost of using the data and information on the results of the mineral survey and prospection of the State.

Article 35.-

1. An organization or individual that is allowed to conduct mineral activities is entitled to use or assign the information on the results of the mineral survey and prospection in which they have invested in all survey and prospection activities.

2. An organization or individual that is allowed to conduct mineral activities, when using part or the whole of the State investment in the mineral survey and prospection, is not entitled to supply or assign the information on the results of the survey and prospection to another organization or individual, except when such information is supplied to the competent State agencies or agencies that have the responsibility of managing and using them as prescribed by law.

3. If six (6) months after the permit for mineral prospection expires the organization or individual that is allowed to conduct the prospection does not apply for exploitation, or if six (6) months after the mineral exploitation permit expires the organization or individual that is allowed to conduct the exploitation does not apply for extension of the permit, the competent State agency is entitled to supply the information on minerals related to these permits to other organizations or individuals.

Article 36.- When permitted to assign or legate the right to prospect or the right to exploit a mineral, an organization or individual that is allowed to conduct prospection or exploitation of this mineral is entitled to assign or legate all properties under their lawful ownership, including the data and information, geological and mineral samples and the constructions and equipment already built up and the furnishments associated with the mining land.

In case the right to mineral exploitation is eligible for assignment, the land lease contract shall be renewed without having to go through the procedure of assignment of the land use right.

The assignment of properties which come under State ownership and which have been assigned for use to an organization or individual allowed to conduct mineral prospection or exploitation shall comply with the provisions of law.

Article 37.- When the permit for mineral prospection or exploitation ceases to be valid, the ownership over the properties related to the mineral prospection or exploitation shall comply with the provisions in Point b, Clause 2 of Article 30 and Points b and c, Clause 2 of Article 40 of the Minerals Law.

The Ministry of Finance and the Ministry of Industry shall provide guidance for the method of determining the value of the assigned properties and the procedure of transferring the properties by the organization or individual that has been allowed to conduct mineral prospection or exploitation to the State in case the permit becomes invalid as prescribed by the Minerals Law and other provisions of law.

Article 38.- The organization or individual that is allowed to exploit minerals shall have to deposit at a Vietnamese bank or a foreign bank which is allowed to operate in Vietnam a sum to ensure the restoration of the environment and the land after the completion of the operation of each part of the area as well as when the mine is closed.

The amount of deposit for the restoration of the environment and the land shall be based on the process and tempo of exploitation and restoration and the estimated cost for restoration determined in the feasibility report, the mine design and the report on the evaluation of the impact on the environment already examined and accepted by the competent State agencies.

The Ministry of Finance and the Ministry of Industry, the Ministry of Science, Technology and Environment shall stipulate the method of determining the amount of deposit to restore the environment and the land in mineral exploitation and guide the filling of the procedure for its registration, management and use.

Article 39.- The Ministry of Finance shall elaborate and submit to the Government for promulgation the regime of distribution and use of the State revenues in the mineral activities in implementation of the policy of protecting the interests of the local population where the mineral is exploited and processed as provided for in Article 7 of the Minerals Law and protecting the untapped mineral resources.

Article 40.- With regard to the mines having a strategic role in the socio-economic development plans of the whole country but for which the raising of investment from other sources is meeting with difficulties, the State enterprise may borrow preferential credits from State capital in order to invest in mineral survey and prospection; in special cases, the Prime Minister shall decide the allocation of State capital to directly invest in prospection. The State investment in mineral prospection shall have to be recovered gradually after the mine begins operation. In case of incident, it shall be considered for reduction or exemption at the proposal of the Ministry of Industry, the Ministry of Planning and Investment and the Ministry of Finance.

Chapter VII

EVALUATION AND RATIFICATION OF PROJECTS AND REPORTS IN MINERAL ACTIVITIES

Article 41.- An organization or individual that is allowed to conduct mineral activities may on its own or through its consultancy organizations or specialists in geology and mining with legal person status draw up or evaluate the projects and programs, mine designing and mine closure in mineral activities.

Article 42.-

1. The Ministry of Industry shall evaluate the project on mineral survey or prospection before deciding to grant permit for survey or prospection.

2. The evaluation of a project comprises the following:

- Location, boundary and area;

- Geological foundations and the objectives of the survey and prospection (the kind of mineral, quantity, extent of the study);

- Technique and technology;

- Impact on the environment and ecology, on the natural resources, constructions and other properties;

- Duration and tempo of operation;

- Estimated cost.

3. The Minister of Industry shall base himself/herself on the evaluation result to ratify the projects on survey and prospection partially or wholly funded by State capital.

4. With regard to the projects which do not use State capital, the contents of the ratification of the project are stated in the permit for survey and the permit for prospection.

Article 43.-

1. All reports on the results of mineral prospection partially or wholly financed by State capital shall have to be evaluated and ratified before they are sent to the State geology archives or for use in the feasibility study for mineral exploitation.

2. Even if it is used only as a document to study the feasibility for mineral exploitation, the report on the prospection result conducted without State funding shall have to be evaluated by a competent State agency stipulated in Clauses 4 and 5 of this Article.

3. Requirements and contents of the evaluation of a report on mineral prospection:

- Reliability of the quantity and quality of the mineral including the accompanying minerals; detection of defects in the prospection leading to the overlooking of mineral resources;

- The extent and quality of the determination of the hydrological geology, construction geology, the various conditions on technique and technology related to the selection of the technology of exploitation, processing and rational use of the mineral resource;

- The result of the prospection, effectiveness of the prospection investment (if State capital is used) compared to the objective of the project which has been evaluated, accepted or ratified.

4. The Ministry of Industry shall evaluate and ratify the reports on the prospection for minerals used as common building materials. Such reports shall be used as documents to study the feasibility of exploitation.

5. The Council for evaluation of mineral reserve shall evaluate and ratify the reserve in the reports on prospection used as documents to study the feasibility of exploitation of various minerals except those used as common building materials.

Article 44.-

1. The evaluation and ratification of the feasibility studies for mineral exploitation in the investment projects in the country shall comply with the provisions of the Statute on the Management of Investments and Construction promulgated by the Government.

2. The evaluation of a feasibility report on mineral exploitation in the projects of foreign direct investment shall comply with the provisions of the Statute on the Formation, Evaluation and Implementation of the Foreign Direct Investments issued by the Government.

Article 45.-

1. The organization or individual that evaluates a mining design must be an organization or individual whose interests are independent from the designing organization or individual and is answerable before law on the results of its evaluation.

2. A mine design in the investment projects for mineral exploitation using State capital shall have to be evaluated and ratified according to the following regulations:

a/ The design of a mine project in Group A shall be ratified by the Minister of Industry;

b/ The design of the remaining mining projects shall be ratified by the Head of the agency competent to decide the investment.

3. The design of a mining project directly invested by foreigners shall be evaluated by the Minister of Industry.

4. The design of a mining project of the non-State sectors shall be evaluated by the specialized agency of the agency with competence to issue the permit for mineral exploitation.

5. The Ministry of Industry shall provide for detailed guidance of the contents of the design and the procedures for evaluation and ratification of the mining designs.

Article 46.- The Ministry of Industry shall provide for the regime and contents of the periodical reports on mineral activities.

Article 47.- All projects to close a mine must be evaluated and ratified as to the contents and requirements for safety, restoration of the environment and land and other requirements stipulated in Points b and d, Clause 2, Article 40 of the Minerals Law.

The Ministry of Industry shall issue detailed regulations for the closure of a mine.

Chapter VIII

PRINCIPLES AND PROCEDURES FOR GRANTING PERMITS FOR MINERAL ACTIVITIES, ASSIGNING AND LEGATING THE RIGHT TO PROSPECTION, EXPLOITATION OR PROCESSING OF MINERALS

Article 48.- The main bases for considering the granting of permits for mineral activities are the following:

1. The State strategy for socio-economic development in general and particularly the strategy for the development of the industries related to minerals such as energy, metallurgy, building materials, fertilizers, chemicals, transport and the production and trading of mineral materials.

2. The Party and State policy on mineral resources and the strategy and planning on development of the mining industry in each province, region and area and in the whole country in conformity with the strategy for socio-economic development and the strategy for the development of various branches of industries in each period.

3. The social and economic efficiency of the concrete mineral activities associated with the requirements of ensuring security and defense, the protection of the ecological environment, the protection and rational use of natural resources in general and the protection of historical and cultural relics and the other public interests as provided for by related legislation.

4. The financial conditions, the legal qualification of the project owner (investor) as prescribed by law and other concrete conditions defined in this Decree.

Article 49.- Apart from the main bases defined in Article 48 of this Decree, the granting of permits for mineral prospection shall have to solicit the written comments of the provincial People�s Committee as regards the area and boundary of the prospection, excluding the areas already banned to mineral activities.

In special cases where prospection or exploitation of minerals may be conducted in the areas banned or temporarily banned to mineral activities as provided for in Article 19 of this Decree, the granting of prospection permits must have the written consent of the State agency with competence to manage the objects to be protected in the said area concerning the boundary of the prospection area and the conditions regarding the prospection work related to the protection of these objects.

Article 50.- The granting of permit for exploitation or processing of minerals shall be based on the documents evaluating and deciding to ratify the feasibility report of the agency with competence of evaluation defined in Article 44.

Article 51.- Before deciding to grant a permit for mineral exploitation, the application and dossier receiving agency shall have to solicit the opinions of the State agencies competent in land lease and in the management of other resources and resources related to mineral exploitation activities, if there have not been the written consent of these agencies or the provincial People�s Committee before the granting of the prospection permit.

The applicant (investor) shall have to investigate the state of the land in use, the crops and properties associated with the land, the opinions of the land users within the area applied for mineral exploitation and transmit these information to the application receiving agency.

In case of necessity, the application receiving agency may make public the application on the mass media at least twenty five (25) days before the granting of the exploitation permit in order to gather the related opinions, if any.

The consulted agencies shall, within their competence, have to reply to the application receiving agency or the applicant within twenty five (25) days at the latest after receiving the request for comments.

Article 52.-

1. Upon receipt of the valid application and dossier for the issue of permit of investment in mineral exploitation or processing with capital directly invested by a foreign country, the Ministry of Planning and Investment shall have to coordinate with the Ministry of Industry in considering and gathering the opinions of the concerned agencies and submit the matter to the Government for decision or decide itself by virtue of its own competence after getting the written consent of the Ministry of Industry.

2. A foreign organization or individual or a joint venture with a foreign party that has been granted a permit for prospection shall enjoy a number of privileges accorded to an investment permit, such as tax-free importation of prospection equipment' office and laboratory equipment (if needed) aimed at realizing the prospection plan already ratified. The Ministry of Planning and Investment shall provide for the detailed privileges of a foreign organization or individual or joint venture with a foreign partner willing to invest in mineral prospection after consulting the concerned agencies.

3. The permit for mineral exploitation or processing issued to a foreign organization or individual or a joint venture with a foreign partner issued together with or after the granting of the investment permit shall comply with the Law on Foreign Investment in Vietnam.

4. An investment permit granted to a foreign organization or individual or a joint venture with a foreign partner for the realization of a mineral exploitation project may also include activities in prospection, exploitation and processing of mineral.

Article 53.- The time limit for evaluating the dossier of application for a permit for mineral activities, including the time for collecting the opinions of the concerned agencies shall be at most sixty (60) days after receipt of the full valid papers of an organization or individual in the country and ninety (90) days after receipt of the full valid dossier of a foreign organization or individual of a joint venture with a foreign partner.

Ten (10) days at the latest after this time limit the competent agency shall have completed the issue of permit or sent a written answer to the applicant for the permit .

Article 54.- After the permit for mineral activity has been issued as provided for in this Decree, the competent State agencies at the central and local levels shall have the responsibility to settle expeditiously the conditions related to the renting of land, the use of the infrastructure and other related conditions so that the licensed organization or individual can begin their mineral activities.

Article 55.- The organization or individual allowed to conduct mineral activities is entitled to return part of the area or the permit for mineral activities on the following conditions:

1. They have discharged all their obligations as prescribed by law until the moment they apply to return the permit and have restored the environment, the land and ensure safety in the area which is to be returned.

2. Within three (3) months after the prospection permit is returned, the organization or individual that is allowed to conduct the prospection shall have to discharge all their duties stipulated in Point b, Clause 2, Article 30 of the Minerals Law.

Within no more than six (6) months after the exploitation permit is returned, that organization or individual must fully discharge their obligations prescribed in Points b, c and d, Clause 2, Article 40 of the Minerals Law.

3. The competent agency which has issued the permit shall give a written permission to return the permit.

Article 56.- The assignment of the right to prospection and exploitation of minerals must comply with the following regulations:

1. An organization or individual permitted to conduct mineral prospection or exploitation can only assign this right to another organization or individual for continued discharge of this right and obligation already defined in the permit and the provisions of law.

2. The assigned properties, documents and value as well as the financial obligations of the organization or individual permitted to conduct mineral prospection or exploitation which have not been completed and are now assigned together the assignment of the prospection and exploitation right must be inventorized fully and truthfully and clearly determined in the assignment contract between the parties.

3. Together with the contract and the application for assignment of the right to prospection or exploitation, the organization or individual permitted to conduct prospection or exploitation must send a report on the prospection or exploitation up to the time of the application for assignment.

4. The organization or individual that accepts the assignment of the right to mineral prospection or exploitation must meet all the legal conditions stipulated in Article 15 of this Decree.

5. If the organization or individual that accepts the assignment is a foreign organization or individual or a joint venture with a foreign partner, it must have an investment permit issued by the Ministry of Planning and Investment as provided for by the Law on Foreign Investment in Vietnam.

6. The assignment of the right to prospection or exploitation by an organization of individual permitted to conduct mineral prospection or exploitation must be permitted by the competent agency which has issued the permit and must pay tax as prescribed by law.

Article 57.- The right to mineral prospection and exploitation of an individual permitted to conduct prospection and exploitation activities may be legated if the lawful property inheritor of that individual fully meets the conditions stipulated in Articles 15 and 16 of this Decree. If the lawful property inheritor of an individual permitted to conduct mineral prospection or exploitation does not gather all the conditions to continue the activity as provided for in the permit, the following solutions may be applied:

1. The lawful property inheritor of the individual permitted to conduct prospection or exploitation may assign the right to mineral prospection or exploitation under the terms of the permit if the practical conditions do not contravene the provisions of Article 56 of this Decree.

2. If the permit for mineral prospection or exploitation is withdrawn, the property inheritor of the individual permitted to conduct mineral prospection has the right and obligation as stipulated in Point b, Clause 2, Article 30 of the Minerals Law; the lawful property inheritor of the individual permitted to conduct mineral exploitation has the rights and duties stipulated in Points b, c and d Clause 2, Article 40 of the Minerals Law.

Article 58.- A permit for mineral prospection shall be withdrawn under the terms of the provisions of Article 24 of the Minerals Law. In case the organization or individual permitted to conduct prospection violates one of the provisions of Article 23 of the Minerals Law, the time limit permitted for overcoming consequences shall not exceed thirty (30) days after the State minerals management agency of the Ministry of Industry issues a written notice.

Article 59.- A permit for mineral prospection shall be withdrawn according to the stipulations in Article 29 of the Minerals Law. In case the organization or individual permitted to conduct prospection violates one of the provisions in Article 27 of the Minerals Law, the time limit allowed for overcoming the consequences shall not exceed sixty (60) days after the State mineral management agency of the Ministry of Industry issues a written notice.

Article 60.- A permit for mineral exploitation shall be withdrawn under the provisions of Article 39 of the Minerals Law. In case an organization or individual permitted to conduct exploitation activities violates one of the provisions in Article 33 of the Minerals Law, the time limit allowed for overcoming the consequences shall not exceed ninety (90) days after the State mineral management agency of the Ministry of Industry or the Industrial Service issues a written notice under their jurisdiction.

Article 61.-

1. A permit for mineral processing shall be issued to an organization or individual that is not allowed to conduct mineral exploitation on the following conditions:

a/ The application meets all the conditions prescribed in Articles 15 and 16 of this Decree.

b/ The applicant must send a feasibility report on mineral processing attached to the application together with the technological plan already evaluated, ratified and accepted as prescribed in Article 44 of this Decree.

c/ There must be a report on the evaluation of the impact on the environment verified and ratified by the competent State agency.

2. The duration of a permit for mineral processing shall be based on the fesasibility report for each project and in accordance with the investment permit or investment decision.

3. A permit for mineral processing shall be withdrawn if the licensed organization or individual violates one of the provisions on obligations stipulated in Article 45 of the Minerals Law.

4. The assignment and legating of the right to mineral processing shall comply with the corresponding stipulations in Articles 56 and 57 of this Decree.

Article 62.- The exploitation of minerals for use as common building materials shall not need a permit in the following cases:

1. The exploitation of minerals for common building materials in the framework of projects of construction of State infrastructures such as dams, canals of hydro-electric power plants, irrigation works, leveling of road beds, tunneling, dredging of rivers and lakes, ports, underground defense works and other State projects of similar character, on condition that the mineral is not exploited outside the construction area, the projects are not sold and the investment projects and construction designs have been expertized and ratified as prescribed by law.

2. The full collection, transport and use of the land and rock fills of the operating mine of which the main product is not a mineral for use as common building material.

3. The exploitation of mineral for use as common building material within the area assigned by the State to the organizations and individuals for use.

Article 63.- The exploitation of different kinds of soil to supply materials for land fill in the construction of urban projects shall be allowed on the basis of ensuring the following requirements:

- There must be a geological survey documents about the exploitation area proving that there is no other mineral of higher value and such document is certified in writing by the Industrial Service.

- The land where exploitation is applied for is not agricultural land or protection forest land.

- The exploitation activities do not adversely affect the ecological environment or the landscape of the area or damage the public projects, infrastructures, historical and cultural relics.

- The exploitation has got permission from the provincial People�s Committee.

Article 64.- The Ministry of Industry shall provide detailed guidance about the procedure for the issue, extension and permission to return the permit for mineral activity, permission of assignment and legation of the right to prospection, exploitation and processing of mineral and the registration of the mineral activities for unified implementation throughout the country.

Chapter IX

FULL EXPLOITATION

Article 65.- Full exploitation is a form of mineral activity in accordance with the following conditions:

1. The survey of the whole area where operation is allowed before exploitation begins is not compulsory.

2. The volume of digging including stone and earth and mineral for a permit of full exploitation issued for an individual (not an enterprise) shall not exceed five thousand (5,000) tons/year and not exceed one hundred thousand (100,000) tons/year for an organization.

3. The tools and method used in the full exploitation activities must be primarily handicraft although small mechanized means may be used in some stages of the exploitation; in case explosive is used, it must be handled by specialized personnel who have gone through training and examination and provided with certificates as prescribed by law; no toxic chemicals are allowed.

4. In case the organization is an enterprise responsible before law to organize for an individual (not an enterprise) to conduct full exploitation in the form of contract or card of full exploitation, the annual exploitation output of each contract or card of full exploitation shall comply with the prescriptions for the permits for full exploitation issued to individuals (not enterprises).

5. Each individual shall be issued only one permit for full exploitation.

Article 66.- The areas eligible for a permit for full exploitation comprise the following:

1. Areas where the mineral is distributed unevenly and where investment for industrial-scale exploitation shall not be economically efficient.

2. Areas with only minerals for use as common building materials and where social and economic conditions as well as the demand for consumption do not justify investment for industrial scale exploitation.

3. A mining area where a decision has been issued to close the mine and where the conditions for exploitation does not justify economic efficiency of industrial exploitation investment.

Article 67.- The Ministry of Industry shall zone off the areas meeting the conditions stipulated in Article 66. When requested by the locality, it shall hand them over to the provincial People�s Committee for management, and shall issue permits to the eligible organizations or individuals for full exploitation of all kinds of mineral except the minerals and areas otherwise stipulated by the Government; no permit for full exploitation shall be issued to the areas not yet zoned off and handed over to the provincial People�s Committee by the Ministry of Industry.

Article 68.- The area for full exploitation by a permit issued to an organization shal not exceed twenty (20) hectares, and to an individual (not an enterprise) shall not exeed one (1) hectare.

Article 69.- The term of a full exploitation permit shall not exceed thirty (30) months. It can be extended many times but the total of extensions shall not exceed twenty four (24) months on the following conditions at the time of the application for extension:

1. The organization or individual that is issued with a permit for full exploitation has accomplished all their duties stipulated in Article 52 of the Minerals Law.

2. The area applying for extension still conforms with the mode of full exploitation as provided for by the Minerals Law and in Articles 65 and 66 of this Decree.

3. The statute of limitation of the exploitation permit remains valid for at leat thirty (30) days.

Article 70.- A permit for full exploitation shall be withdrawn according to stipulations in Article 53 of the Minerals Law. In case of a new discovery of mineral and the area under operation for full exploitation no longer conforms to the form of full exploitation, the permit for full exploitation shall be withdrawn and the consequence shall be settled according to the following regulations:

1. The organization or individual allowed to conduct full exploitation must move the whole of their properties out of the mining area, restore the environment and land and shall be paid compensation by the organization or individual that has been previously allowed to conduct mineral exploitation in the area where the permit for full exploitation has been withdrawn; in case no organization or individual is allowed to conduct mineral activities in that area or the permit for full exploitation is withdrawn as stipulated in Clause 2, Article 14 of the Minerals Law, the losses incurred by the organization or individual allowed to conduct full exploitation shall be appropriately settled by the provincial People�s Committee.

2. If the organization or individual that is allowed to conduct full exploitation is qualified to set up an enterprise for mineral activities as stipulated in Articles 15 and 16 of this Decree, they shall be granted a new permit for mineral activities in the area where the permit for full exploitation has been withdrawn.

Article 71.- The organization or individual that is allowed to conduct full exploitation may ask the State agencies, the scientific and technological organizations and the State enterprises conducting mineral activities to guide and help in technique and technology. These organizations shall have to meet the reasonable demands of the organization or individual allowed to conduct full exploitation.

Article 72.- Basing itself on the provisions of the Minerals Law and this Decree, the provincial People�s Committee shall stipulate in detail the management and the issue of permits for full exploitation in conformity with the local conditions after consulting the Ministry of Industry.

Chapter X

SPECIALIZED INSPECTION ON MINERALS

Article 73.- The State management agency on minerals of the Ministry of Industry and the provincial/municipal Industrial Service shall perform its function of specialized inspection on minerals (hereafter referred to as Mineral Inspectorate).

The tasks and powers of the Mineral Inspectorate shall comply with the stipulations in Articles 59 and 60 of the Minerals Law, the Government Decree on Sanctions Against Administrative Violations in the Management of Minerals and the Statute on the Organization and Activities of the Mineral Inspectorate.

Article 74.- The Mineral Inspectorate shall comply with the provisions of the legislation on labor safety, labor hygiene and environmental protection. It shall coordinate with the State Inspectorate on labor and the specialized inspectorate on environmental protection to perform its duty of controlling and inspecting labor safety and hygiene in mineral activities, especially in mineral exploitation activities; cooperate with the State Inspectorate of different branches and levels to settle complaints and denunciations by organizations or individuals in mineral activities.

Article 75.- The Ministry of Industry shall issue a Statute on the Organization and Activities of the Mineral Inspectorate after consulting the Government Commission on Organization and Personnel, the State Inspectorate, the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Health and the Ministry of Science, Technology and Environment.

Chapter XI

IMPLEMENTATION PROVISIONS

Article 76.- This Decree replaces Decree No.95-HDBT of March 25, 1992 of the Council of Ministers on the implementation of the Ordinance on Mineral Resources.

The earlier regulations on the management, protection and basic investigation of mineral resources and mineral activities which are contrary to this Decree are now annulled.

Article 77.- The Ministers, the Heads of ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People�s Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

The Minister of Industry, the Heads of the Ministries and branches concerned shall submit to the Government for promulgation documents attached to this Decree and shall have to provide detailed guidance and monitor and control the implementation of this Decree.

Article 78.- This Decree takes effect from the date of its signing.

On behalf of the Government

The Prime Minister

VO VAN KIET